JPMorgan hit by fall in bond trading

JPMORGAN CHASE & Co reported a lower-than-expected quarterly profit as a slump in bond trading outweighed gains from higher interest rates and loan growth.

Shares of the largest US bank by assets fell 3 per cent in early trading as the lender posted declines in revenue in three of its four main businesses in the fourth quarter.

Overall adjusted fixed income trading revenue fell 18 per cent as investors fled commodities and credit trading markets due to spikes in volatility toward the end of 2018.

Citigroup also cited the same reason for its sharp drop in fixed income revenue on Monday.

Trading desks at banks have been shaken by global growth concerns and the ongoing trade war between the United States and China, with bank stocks underperforming the S&P 500 index in 2018 by 13 per cent.

“As we head into 2019, we urge our country’s leaders to strike a collaborative, constructive tone, which would reinforce alreadystrong consumer and business sentiment,” chief executive Jamie Dimon said.

JPMorgan’s profit also took a hit from a 6 per cent rise in expenses as it invested in technology, marketing and real estate.

The bank’s net income rose 67 per cent to $7.07bn from a year ago when it took a one-time charge due to the US tax reform.